Exporting and innovation performance: an analysis of the small, micro and medium enterprise growth index (SME Growth Index) in South Africa

Date
2015
Authors
Flowerday, Wayde Thomas
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Abstract
After the fall of apartheid in 1994, the newly elected African National Congress (ANC) embarked on a journey to redress past injustices left behind by the previous regime. In order to tackle the economic, social and spatial disparities left behind by the previous administration, the ANC highlighted key areas within the South African economy that could be utilised to lessen the gap between members of the South African population. One of the key areas highlighted was that of the importance of small, micro and medium enterprises (SMMEs), and the need for these firms to be engaged within the export market. This paper unpacks the inherent characteristics that may differ between exporting, and non-exporting SMMEs in the South African economy. Consequently, this paper also shows that there is a definite positive association between exporting behaviours and innovation behaviours within the SMME sector. This paper utilises the SME Growth Index as its primary dataset. This dataset allows the paper to investigate the primary characteristics of South African SMME firms that are exporting versus those that are not. Furthermore, as the literature highlights, there is an important link between exporting and innovation behaviours. This dataset thus further allows the paper to illustrate that this link does hold within South Africa, and that there is a positive association between these behaviours. The utilisation of logistic regressions allows this paper to show the strength of the link between innovation and exporting practices in South African SMMEs, but at no point is a mention of causality made, due to the inherent endogeneity and sample selection bias that is present in this study. The paper concludes by showing that there is indeed a difference between South African exporting firms, and their non-exporting counterparts, thus illustrating that a “one-size-fits-all” policy plan to enhance exporting culture amongst SMMEs is not acceptable. Furthermore, the paper does establish a positive association between innovation and exporting behaviours amongst South African SMMEs, something which had not yet been done in the existing literature.
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Thesis (M. Economic Science)--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic & Business Sciences,
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